Electric mobility venture funding had another record year in 2018, during which Chinese new energy vehicle (NEV) and electric scooter startups raised hundreds of millions in funding and achieved billion-dollar valuations at breakneck speeds.Xiaopeng Motors, which develops electric and autonomous vehicles at its headquarters in Guangzhou, China, raised a $350 million round in February and is now rumored to have a $4 billion valuation. Youxia Motors, another Chinese NEV startup, raised a staggering $795 million Series B round in April. Meanwhile, electric scooter sharing startup Bird, which was founded in September 2017, doubled its valuation from $1 billion at the end of May to $2 billion at the end of June.

To dig deeper into the energy mobility funding landscape, we identified and analyzed venture capital investment activity using specialized Lux-developed tools (view our Electric Mobility technology page for a review of our methodology). The stacked bar chart below shows the regional variance in funding for energy storage companies since 2001; unsurprisingly, Asian and North American companies have continued to dominate electric mobility venture funding. In total, electric mobility startups raised more than $9.2 billion in venture capital in 2018. However, this is only a comparatively moderate increase over the $8.3 billion in venture funding raised in 2017, which was a staggering 233% increase over 2016's $2.5 billion in funding, indicating that electric mobility venture funding may be starting to plateau.

The second bar chart shows that of the top 25 electric mobility funding recipients in 2018, 12 companies are based in Asia (highlighted in orange) and six companies operate electric scooter sharing networks (Lime, Bird, Skip Scooters, Grin Scooters, Voi Technology, and Cityscoot, in decreasing funding amounts). Yet, as always, it is important to note that large funding rounds do not necessarily correlate with success. Youxia Motors raised more than $1 billion in 2018, but as an almost identical copy of the Tesla Model S, it does not appear to have any differentiated technology, and we recommend that clients ignore the company. Proterra, which designs and manufactures 35 ft and 45 ft electric buses, raised a $155 million Series G round and is the company we view most favorably among all of the startups in this figure. The last company of particular note is ChargePoint, which develops and manufactures hardware for battery electric vehicle (BEV) charging and raised a $240 Series H round in November; however, as other BEV charging companies have managed to build significant networks without raising hundreds of millions of dollars from equity financers, it is not a great sign that the company needs this much funding.

Outside of startup activity, 2018 also saw major automotive OEMs solidifying their commitment to developing electric mobility solutions (see our 2018 BEV Inflection Tracker for automakers' BEV strategic roadmaps). Governments have also quickly reacted to the boom in startup activity: In early January 2019, China's central government implemented new rules to stem further BEV production from smaller, newer startups as the country seeks to limit overcapacity. In the U.S., cities are continuing to ban dockless electric scooter sharing networks, as locals complain about riders abandoning scooters in the middle of sidewalks and detractors vandalize scooters by throwing them into lakes and setting them on fire. Thus, while the electric mobility space will continue to grow to address increasing demand for BEVs, clients should expect saturated startup fields – namely China's NEV landscape and the U.S.'s electric scooter companies – to start consolidating, as neither the market nor investors will be able to support financial growth for all competitors. Clients determined to enter the fray need to offer a differentiated product that meaningfully adds value – autonomy for electric vehicles or scooters that network with public transit systems – or risk being a casualty of consolidation themselves.

FURTHER READING

Electric mobility venture funding had another record year in 2018, during which Chinese new energy vehicle (NEV) and electric scooter startups raised hundreds of millions in funding and achieved billion-dollar valuations at breakneck speeds.